Financial Crime World

Bulgaria Cracks Down on Money Laundering with Robust Detection Methods

As a member of the European Union, Bulgaria has implemented a comprehensive anti-money laundering (AML) framework to combat financial crimes and safeguard its financial system.

Key Legislation

Bulgaria’s Money Laundering Act is the primary legislation governing AML, aligning with EU directives and international standards. The Anti-Money Laundering Measures Act complements the MLA by outlining detailed measures for financial institutions to prevent and detect money laundering activities. The Criminal Code also includes provisions related to money laundering as a criminal offense.

Regulatory Authorities

Several regulatory authorities play a crucial role in overseeing AML compliance in Bulgaria:

  • Financial Supervision Commission (FSC): responsible for supervising financial institutions, including banks, insurance companies, and investment firms.
  • Bulgarian National Bank (BNB): monitors credit institutions and non-bank payment service providers’ compliance with AML regulations.
  • Financial Intelligence Directorate (FID): receives, analyzes, and disseminates suspicious transaction reports to law enforcement agencies.
  • Ministry of Finance: coordinates Bulgaria’s AML efforts at the national level.

Compliance Requirements

To comply with Bulgarian AML regulations, companies must:

  • Disclose the identity of their ultimate beneficial owners (UBOs) and appoint a contact person who is a Bulgarian citizen.
  • Implement comprehensive AML programs, including risk assessments, policies, and procedures.
  • Conduct thorough Know Your Customer (KYC) checks on customers to verify identities and assess risk profiles.
  • Monitor customer transactions for suspicious activities and report them promptly to the FID.
  • Maintain records of customer transactions and due diligence documentation for at least five years.

Penalties for Non-Compliance

Bulgaria imposes severe penalties for non-compliance with AML regulations, including fines and imprisonment. Financial institutions may face fines for failing to implement adequate AML controls or facilitating money laundering activities.

International Cooperation

Bulgaria actively cooperates with international organizations and countries in the fight against money laundering and terrorist financing, being a member of the Financial Action Task Force (FATF).

Conclusion

Bulgaria’s commitment to combating money laundering and terrorist financing is evident through its robust AML legal framework and regulatory authorities. To ensure compliance, financial institutions and designated non-financial businesses and professions operating in Bulgaria must adhere to stringent requirements. Staying informed about the evolving AML landscape and continuously improving AML controls are essential for maintaining the integrity of the global financial system.